Klayman v. Judicial Watch, Inc.
255 F. Supp. 3d 161
| D.D.C. | 2017Background
- Larry Klayman sued Judicial Watch alleging multiple breaches of a Severance Agreement; five breach-of-contract claims remain (failure to remove guarantor, failure to pay children’s health insurance, filing frivolous pleadings in Florida, failure to provide access to client documents, and alleged disparagement/non-disparagement breach).
- The Court previously imposed two discovery sanctions on Klayman that (1) barred him from testifying or introducing documents in support of his damage claims and defenses, and (2) precluded him from introducing any witnesses or exhibits at trial.
- At a 2017 pretrial hearing the Court asked briefing on what types of damages Klayman could pursue given those sanctions; Klayman sought to pursue reputational and emotional distress damages (and to consolidate a new 2017 action with this case).
- The Court concluded the sanctions largely prevent Klayman from adducing the affirmative evidence needed to establish measurable contract damages, leaving him limited to nominal damages (or specific performance for the document-access claim).
- The Court carved out a limited opportunity on the non-disparagement claim: Klayman may, by June 30, 2017, identify documents already produced in this litigation that show calculable monetary loss from specific lost business opportunities (e.g., a denied CNN appearance); absent such documentary proof, even the disparagement claim is limited to nominal damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of discovery sanctions on damages proof | Klayman sought to pursue economic, reputational, and emotional-distress damages despite sanctions | Judicial Watch argued sanctions preclude Klayman from introducing evidence to prove damages | Sanctions bar Klayman from adducing affirmative evidence of damages; he is limited to nominal damages (except limited chance to show monetary loss on disparagement claim) |
| Recoverability of reputational damages for breach of non-disparagement clause | Reputational loss and lost opportunities flowed naturally from breach and are compensable | JW argued reputation damages are generally not recoverable in contract actions and were not proven here | Reputation damages may be recoverable if (1) contemplated by parties and (2) proved with reasonable certainty; the Agreement’s non-disparagement language supports contemplation, but Klayman must identify existing discovery documents showing calculable lost opportunities or be limited to nominal damages |
| Recoverability of emotional distress / punitive damages for contract breach (merger doctrine) | Klayman sought emotional distress damages and punitive damages under a theory that the breach merged into an independent tort | JW argued Choharis and related authority preclude extra-contractual damages absent an independent tort duty separate from the contract | Following Choharis, emotional-distress/punitive damages are unavailable because the alleged wrongs arise from contractual duties and not an independent tort; IIED and punitive damages are foreclosed |
| Motion to consolidate 2006 action with 2017 action | Klayman argued the two suits arise from the same Severance Agreement and common facts/legal questions | JW argued the actions involve distinct events, different time periods, and are at different procedural stages; consolidation would prejudice JW and delay trial | Motion to consolidate denied: claims arise from different facts and timeframes, actions are at different procedural postures, and consolidation would create confusion and prejudice particularly given existing sanctions |
Key Cases Cited
- Redgrave v. Boston Symphony Orchestra, 855 F.2d 888 (1st Cir. 1988) (reputation damages generally unavailable in contract suits absent proof of lost identifiable professional opportunities)
- Choharis v. State Farm Fire & Cas. Co., 961 A.2d 1080 (D.C. 2008) (breach cannot ‘merge’ into a willful tort absent an independent duty separate from the contract)
- Sere v. Group Hospitalization, Inc., 443 A.2d 33 (D.C. 1982) (Doctrine permitting punitive damages where breach merges with a willful tort)
- Nugent v. Unum Life Ins. Co. of Am., 752 F. Supp. 2d 46 (D.D.C. 2010) (dismissing IIED/punitive claims where injuries were inextricably linked to contractual duties and no independent tort was alleged)